Start-up Rivigo launches ‘National Freight Index’ for live freight rates
National Freight Index (NFI) that will provide live freight rates for different lanes and vehicles across the countryNFI will bring a pricing transparency
NEW DELHI : In its bid to bring transparency in the road-freight marketplace, Gurgaon-based tech-enabled logistics start-up Rivigo has launched National Freight Index (NFI) that will provide live freight rates for different lanes and vehicles across the country.
The Indian road freight market size is estimated at $150 billion-$160 billion, of which $130 billion-$140 billion is full-truck load (FTL) market, but it has been facing a growing challenge of shortage of truck drivers.
“Logistics account for nearly 14% of India’s GDP and 70% of it comes from road transportation. But, there is no pricing transparency and working conditions of drivers is deplorable. Nobody wants to be a truck driver anymore and the country could face a 50% shortage of truck drivers by 2023. We intend to address that," said Deepak Garg, who founded the start-up along with Gazal Kalra, both former McKinsey consultants.
According to Kalra, the NFI launched by the firm is a step towards easing that crisis and streamlining the sector by giving live spot rates on over 7 million lane and vehicle type combinations in the country. "It will bring a pricing transparency, in a system where the demand traditionally flows from transporters, brokers, fleet owners and then to drivers."
The actual freight rates are in Indian rupee per ton-km and in terms of relative movement with respect to a base month, and would be updated in real time. The NFI will also give historical spot price movements of the road freight industry.
“There are high inefficiencies in the existing freight market, which leads to a great loss of value. We plan to ensure unrestricted access by giving a fair and precise representation of the state of the spot market in the country," said Kalra.
The firm owns a fleet of 3,000 trucks and attempts to provide reasonable working hours for driver by using a "relay model", wherein a truck driver takes the shipment from a first destination to another within a few hours and then “relays" the truck to another driver and returns to his starting point in another truck.
The start-up has adopted machine-learning and economics powered pricing algorithms, wherein the rates on the exchange and index are computed using millions of data points from historical transactions, current market dynamics, micro market insights and other factors.
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